FSMTC Director Dmitry Shugayev (R) meets with President Vladimir Putin in 2021. Source: Kremlin
Russia traces the history of its arms export control system to 1953 under the Soviet Union, with this month marking the 70th anniversary of the establishment of Russia’s system of military technical cooperation with foreign countries.
In a statement marking the occasion, Russian President Vladimir Putin said, “Russia confidently retains its status as a leader on the global arms and military equipment market,” despite “unprecedented sanctions pressure” from the United States.
Dmitry Shugayev and Alexander Mikheev, key personalities in Russia’s defense sector, spoke to state media this week as well. Shugayev heads the Federal Service for Military-Technical Cooperation (FSMTC), which regulates Russian arms exports. Mikheev is the CEO of state arms export agency Rosoboronexport.
Arms Exports and Western Sanctions
Russian state-owned companies as well as top defense-related officials have come under Western sanctions, such as the CAATSA restrictions, that aim to pressure Russian arms exports. According to Shugayev, the backlog of export orders is worth around $50-55 billion. (Little transparency is ever provided about this figure, which has been cited at similar levels for years.)
To shield Russian arms exports from Western sanctions, Shugayev said this week that “alternative schemes of settlements are being introduced, the system of insuring international freight carriages is being improved, and measures are underway to protect the interests of our partners.” Those alternative settlement models “increasingly use national currencies,” he added.
Part of Shugayev’s commentary also addressed the quality of Russian military hardware. Russia’s invasion of Ukraine has resulted in the loss of large numbers of equipment, raising questions about the battlefield performance of Russian military systems. Shugayev, however, stressed to media this week that foreign militaries importing Russian-made equipment “understand that they will obtain modern equipment meeting their requirements and boasting parameters that match the highest world standards and that have been tested in real combat conditions.”
Military-Technical Cooperation
Moscow has traditionally viewed arms sales as a tool to cultivate ties with partner countries. On Monday, Rosoboronexport CEO Alexander Mikheev called defense cooperation with foreign countries an “important foreign policy tool that effectively helps promote the state’s interests in all strategically important regions of the world.”
Officials pointed to Africa, the Middle East, and Asia as core areas for Russian arms exports. Moscow hopes to deepen its joint work with India, in particular. Mikheev said, “T-90 and T-72 tanks, BMP-2 infantry vehicles and Mango and Invar ammunition are made in India. Production of AK-203 Kalashnikov rifles has begun at a plant in Korwa to be fully localized eventually. There are joint projects with the Indian Navy, and we are expecting cooperation in the field of air defense.”
Mikheev highlighted armored vehicles and related subsystems, especially remote combat weapon stations, as an area of partnership with foreign defense companies. The Rosoboronexport CEO said in a press release, “One promising business line we are already carrying out is to install combat modules produced by partner countries on a Russian chassis. We are also offering and have already successfully integrated modern Russian combat modules with the armored vehicles of foreign customers.”
The global arms market will increasingly focus on unmanned systems and artificial intelligence, Mikheev said. He also pointed to electronic warfare systems, protected communications equipment, and anti-drone technology as areas of growth. Kalibr cruise missiles have received interest from Russia’s arms export customers, Mikheev noted.
Military markets analyst, covering Eurasia, Middle East, and Africa.
